How online genealogical database programs operate - Part Three

Most of the large (and smaller) online genealogical databases fall into several distinct categories:

• Commercial enterprises that try to make a profit for their investors or stockholders
• Non-profit organizations dependent on fund raising or contributions
• Sponsored organizations that have government support through taxation
• Sponsored organizations that have private religious or educational backing and support
• Personally maintained entities that have private support
• Cooperative entities that are maintained by volunteers
• Entities that are supported by membership organizations

It is sometimes difficult to know, from the information provided by the entity online, the exact type of organization. In some instances, I have been able to find corporate filings or other public documents that disclose the ownership or sponsorship of the online entities. In other instances that information has not been available. There always seem to be a number of start-up companies touting some new innovation and hoping to capture a share of the genealogical market. 

Although the numbers of members, users and or subscribers to the very large online genealogical database companies would seem to support a claim of broad support for genealogy as a pursuit, the reality of the genealogical market would argue otherwise. Of course, there are people who spend nearly all their time and substantial resources in support of their personal genealogical research, but overall, most of the money passing hands is in the form of subscriptions to a relatively few large entities. 

Except for the purchase of a personal genealogy database program, attendance at a conference or a subscription to an online database, most genealogists spend very little on genealogy. If you also include travel expenses for research and the purchase of specialized equipment, such as a scanner or camera, you can argue that the expenditures are somewhat higher. But for example, if a genealogist buys a camera, is that a genealogy expense or merely someone buying a camera? When you see online statements about the size of some commercial market or another, including genealogy, you should be highly skeptical of the numbers. Genealogy is not like buying a can of soda or attending a movie. Interest and participation in genealogy does not equate directly to the amount of money spent in any given area. 

From the evidence of the number of genealogically related companies acquired over the past few years, it is very evident that the very large genealogy companies are profitable. Although profitability in any commercial enterprise is a slippery subject. Stories about technology based companies, started by some college kids in a garage or the equivalent, that end up becoming billionaires in matter of a few years are the folklore background of our society. In genealogy, we have our own such story in the history of Ancestry.com and MyHeritage.com, but the success of these two companies does not somehow magically apply to other commercial startups. This observation does not rule out the possibility that a small startup will not "make it into the big time," but it does mean that there are now a number of large companies in the market where none existed previously. We need to remind ourselves, from time to time, that companies such as Apple and Microsoft grew up with the industry and if you set out today to compete with any of the large companies you would already be facing competition. They same situation applies to genealogy. If a small startup found a niche market and began to grow rapidly, it is more likely that they would be bought out by one of the larger companies than grow to a position of becoming a competitor. 

It is interesting to consider the sponsors of the upcoming RootsTech 2015 Conference in Salt Lake City, Utah. Presently, on the startup page, there are eleven entities listed as "sponsors." Of course, the main sponsor of the Conference is FamilySearch, a wholly owned non-profit corporation of The Church of Jesus Christ of Latter-day Saints. But three of the other sponsors are also non-profits: The Federation of Genealogical Societies, American Ancestors and The Association of Professional Genealogists. The three other large online genealogical database companies are also sponsors: Ancestry.com , findmypast.com and MyHeritage.com. The remaining four listed sponsors are not genealogy companies at all per se, they may have an interest in related products, but they are primarily involved in other commercial activities. In 2014, the Conference included sponsors such as computer companies Dell and Lexmark. It is still early, but it would appear that the lineup of sponsors is undergoing a change which would be expected in the volatile technology community. For example, one of the sponsors in 2014 was Mocavo.com, now owned by findmypast.com. 

This is an interesting subject to think about and watch.